New York lawmakers are considering legislation that would limit how insurers assess risk by preventing companies from using a driver’s credit history as the primary factor in issuing or renewing auto insurance policies.
Assembly Bill 6053, introduced in the state Senate, would also prohibit insurers from requesting a policyholder’s credit information for renewal purposes.
According to AM Best report, the proposal is part of a broader debate over credit-based insurance pricing, which insurers argue helps predict the likelihood and severity of claims.
Trade groups caution that removing credit scores from underwriting could lead to higher premiums for drivers classified as low-risk under current models.
Read more: How poor credit affects your insurance bill
Assemblymember Pamela Hunter, a Democrat from Syracuse who sits on the Assembly’s insurance committee, supports the bill, arguing that credit scores are an unreliable measure of driving risk.
“While many carriers might argue that there is a correlation between credit scores and driving history, it is just that, correlation and not causation,” Hunter said in a statement sent to AM Best.
Hunter added that lower-income individuals could be unfairly penalized under the current system despite having safe driving records.
Hunter pointed to a shift in the industry toward behavioral-based underwriting. She said that insurers are increasingly adopting telematics, which track driving habits such as speed and braking, as a way to assess risk more directly. These technologies, she said, can lead to premium discounts for policyholders with safe driving patterns.
The New York Insurance Association did not provide a comment on the proposed legislation.
The role of credit history in insurance pricing is also under review in other states. Washington lawmakers are advancing a bill to study how credit-based underwriting affects insurance costs.
The issue has been a policy focus in the state for years, with former Insurance Commissioner Mike Kreidler advocating for restrictions. His successor, Patty Kuderer, has continued the effort by proposing a study on the practice’s impact.
New Mexico is also considering a similar measure that would ban insurers from using credit information when underwriting, rating, or renewing personal auto, motorcycle, or RV policies.
Should insurers continue using credit history to determine risk, or does this practice create unfair barriers for certain drivers? Join the conversation in the comments.
